Bitcoin Breaks $8,000, 4 Factors Behind the Rally
Bitcoin price has broken $8,000 for the first time since July 2018, with most cryptocurrencies trading in the green. The rally has sent bitcoin top the Baidu hot searches (Google Trends equivalent in China) on May 14.
As of press time, Bitcoin is trading around $8,135, up over 15% over the past 24 hours and nearly 40% in the week. While no one is sure why bitcoin has skyrocketed, many believe there are several factors driving the surge.
MLM funds in
Chinese crypto traders believe that the scam coin Vollar (VDS), one of the most talked about cryptos these days, is a factor behind the bitcoin rally. As investors must use BTC to exchange for VDS, it brought a considerable amount of funds into the crypto space.
The lottery-like game VDS has gone viral these days in the Chinese crypto community for its MLM promotion and bitcoin reward. The coin has once increased from 4 yuan per coin in March to a high of 85 yuan. Despite its pyramid scheme nature, it still draws large amount of new money in. It is estimated by local media that VDS has drawn about 7.2 billion yuan (roughly $1.05 billion) capital, next to the market cap of 14th largest cryptocurrency BSV.
“Old money” in
Major financial and tech institutions are bringing good news to bitcoin. Social media giant Facebook, boasting more than two billion users across its various platforms, is revealed to launch a private cryptocurrency following reports that it’s looking to get venture capital firms to invest in its cryptocurrency project.
JPMorgan announced to roll out a USD-pegged stablecoin for cross-border payments; the world’s largest asset manager Fidelity is about to roll out bitcoin trading for institutional clients in the coming weeks.
Bakkt, the digital asset exchange that shares a parent company with the New York Stock Exchange, announced on Monday that it would begin user acceptance testing for bitcoin futures contracts in July.
China-US trade war
In last night’s Xinwen Lianbo – a daily news program produced by state-run China Central Television (CCTV), the Chinese government stated strongly to its people that Beijing has made adequate preparations for the trade war with US, the tough speech was highly praised by the Chinese and went widely spread soon.
As the tension between the two largest economies grows following Beijing’s hardcore fightback broadcasted to all the Chinese, the stock markets crashed again while bitcoin could emerge as a global hedge for its decentralization feature that protects it from political intrigue. The US-China relations may or have sparked the potential for bitcoin as sophisticated investors turn to the crypto market.
As bitcoin price continues to rise, it’s clear there’s a FOMO (fear of missing out) sentiment as crypto traders who were waiting to buy bitcoin back lower than $4,000 are coming to realize that they might miss their chance and thus hurry to buy bitcoin at a comparatively higher price before it goes more expensive.
At what price will see FOMO from those who gloated about 90% crash in $BTC?
Military term, SWAG (scientific wild-assed guess).
My SWAG is $10,000 is price that causes FOMO from those who saw #bitcoin as dead forever.
At what price do we see FOMO?
— Thomas Lee (@fundstrat) May 12, 2019
Bitcoin bull Tom Lee asked via a Twitter pool what price BTC must hit for people gripped by FOMO to jump back in. 45% of the respondents thinks $10,000 is a psychological mark and 23% believe it is now.